"When you clock the human race with the stopwatch of history, it's a new record every time" - Firesign Theatre.
Res ipsa loquitur

Sunday, June 12, 2011

Adult conversation? ... Not quite convinced

So this weeks' Jack Kelly column seems like he might be trying for an adult conversation. However, just like Tim Pawlenty's economic proposal (really just like it), Kelly's version of an adult conversation requires you to be half asleep.

Kelly starts his column by noting and then attacking a recent Obama speech in Toledo about the state of the auto industry. Kelly delights in the fact that the Washington Post "fact checker" found what he considered to be various inaccuracies in Obama's speech. I would suggest they might be closer to caveats, in any case I would suggest you read the piece for yourself, including the linked White House response. In any event, Republicans (or in Kelly's case, a conservative pundit) coming back to talking about unemployment is at best ironic. The Republicans made great noise about unemployment last summer leading into the midterms, and then abruptly stopped talking about it. I am aware of no bills coming out of the (Republican controlled) House of Representatives that address unemployment, unless you count Paul Ryan's fantasy budget (I wouldn't). Late in his column Kelly mentions an unnamed "corporate CEO" who tells Yale Law professor Stephen Carter (sitting next to him on a flight) that demand for his company's products is up, but the CEO will not hire new people, because he doesn't know what they will cost in some indeterminate future. This should be a huge red flag. First of all, CEO's have lost a lot of credibility in employment matters since their average salaries have ballooned so much compared to what ordinary workers make. Second, any intelligent observer of current American politics knows that with the House currently in the hands of the Republicans, there are not going to be any new radically strong government regulations of business; any uncertainty on the part of business is just posturing. Which leads me to my final point, business (in the form of the Chamber of Commerce person on "ABC's This Week" last Sunday) has taken up the Republican's talking points, essentially removing any credibility they might have had. Business is indeed refusing to hire people, forcing their current employees to work that much harder to keep up with rising demand and pushing profits for a number of industries to higher levels. To me, this is the Republican version of patriotism.

But to me what is worse than Kelly's essentially encouraging business to sabotage the economy is Kelly's discussion of taxes and tax rates. Kelly sort of barely broaches the idea of raising taxes to address our deficit and debt before pivoting to attack new business regulation (which I will come back to), I guess to establish his "adult" status and that conservatives are far more willing to compromise than those evil Democrats. But even before that, he responds to an Obama statement that current taxes are lower than they were in the Reagan administration. Kelly goes into detail about how by the time Reagan left office, there were only two tax brackets, 15% for incomes up to $17,850 and 28% for incomes above that. Since Kelly rarely goes into detail in any matter (most Republican proposals can't stand too much scrutiny), I suspect his departure from his usual form is no accident, especially since I believe Tim Pawlenty also recently proposed reducing the tax brackets to just two, very similar to the 1987 setup. We may remember that the first George Bush pledged not to raise taxes when he came into office, and then decided he had to anyway (presumably not because of overspending on social programs by Saint Reagan, those were the years when Congress could easily raid the Social Security trust fund).

I guess Republicans sell these simpler and fewer tax brackets by playing on the difficulties average voters have in filling out and filing their taxes. Also, fewer tax brackets would make our income taxes less "progressive" (a tax term meaning that the poor are not hit so hard by taxes), anytime the Republicans can make something less progressive I imagine their hearts must sing. But the real reason for trying to insert this two bracket tax system into our consciousness is that the top bracket of 28% is lower than the current top bracket of 35%. Sure, the real beneficiaries would be people making over 250 grand a year (500 grand for married filing joint), but those are the people who feel they are paying too much in taxes already. They would rather give Republican Congresspersons five grand for campaign funds than give the government an extra ten grand in taxes. That the poor and middle class would pay more in taxes, and also pay more percentage wise on total revenues is o more than incidental.

Finally, the idea implied in the title of Kelly's column that business is too regulated is truly laughable at this moment in history. Given what happened in the housing market and with the banks, it takes true brass balls to insist that industry is too highly regulated right now. The main stream media is now asking (in polling questions) whether people expect another great depression to occur soon, and the number who do is going up. Yet Republicans actually think they can sell us on the idea the less government is the solution for that and all other problems. This is doubly laughable when we remember the spending orgy during the Bush administration.